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View all search resultsSemiconductor diplomacy: How Indonesia can play its hand
By trading raw mineral wealth for technology transfers and seizing the neutral ground in the chip war, Indonesia can turn a high-stakes geopolitical scramble into its greatest industrial leap.
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Heavy equipment is parked at a silica sand mine on Sebangka Island, Riau Islands province, in this file photo published on April 21, 2024. (Antara/Private document)
Geopolitical power is no longer defined merely by military might or abundant natural resources. Today, it is etched into silicon.
Microprocessors underpin everything from modern logistics networks to advanced defense architectures. The nations leading the semiconductor race will dictate the frontiers of artificial intelligence, quantum computing and global economic resilience. Those that lag behind risk permanent structural dependency.
To ensure it is not sidelined, Indonesia must place semiconductor diplomacy at the center of its foreign policy. This requires using statecraft to advance national interests within global technology value chains: mitigating supply chain disruptions, securing critical technology transfers, drawing high-value foreign direct investment and cultivating specialized domestic talent.
The semiconductor industry is not simply a commercial enterprise; it sits squarely at the nexus of industrial statecraft and national security. Yet building a domestic chip ecosystem from the ground up is notoriously difficult. It demands decades of sustained commitment, tens of billions of dollars in capital, proprietary technology and deep pools of specialized engineering talent.
Crucially, no single country commands the entire value chain. A single advanced semiconductor traverses half a dozen borders, involves hundreds of suppliers and undergoes thousands of precision processes before deployment.
While this mutual interdependence ought, in theory, to foster international stability, current geopolitical realities point in the opposite direction. Interdependence is increasingly weaponized amid great power competition, turning supply chain choke points into geopolitical leverage.
Navigating this reality demands more than domestic industrial subsidies. Indonesia must leverage statecraft to secure what it cannot build alone.
